Why do you need to leave blanks in your named range?
This makes life a bit more complicated than needs be.
However given that you are using 2007 this might help, in pre-2007 dynamic named range "Data_List" will need expanding to substitute IFERROR()
Name:= "Data_List"
Refers to:=
Name:= "Validation_List"
Refers to:=
In B2 this array formula
Confirm with Ctrl+Shift+Enter not just Enter
Drag/Fill Down
Because this formula is volatile, the use of dynamic named ranges reduces the potential impact on your worksheets' performance.
Then say in E1
Data Validation
Allow:+ List
Source:=
Hope this helps
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